Risky business: corporate risk regulation when managing allegations of crime

Abstract

This article seeks to develop an understanding of how corporations manage their social and ethical responsibilities, whilst simultaneously facing allegations of crime. It draws on the case of TeliaSonera, a Swedish corporation prosecuted for committing bribery in Uzbekistan. The article begins by introducing the reader to this so-called ‘Uzbek affair’, before exploring how corporate governance has shifted in the new regulatory landscape, and the role CSR plays in this landscape. Secondly, it critically deconstructs TeliaSonera’s regulatory regime, in order to analyse how the risks of corruption and bribery are managed in the aftermath of the Uzbek affair, and what functions this management fulfils for the corporation’s front stage performance. By drawing on the distinction between primary and secondary risk management as proposed by Power [1, 2], the article argues that the regime in place to manage social and ethical risks simultaneously manages reputational and profitability-related risks, thus illustrating the dual functions of corporate risk management. This duality, it is suggested, is a consequence of the responsibilisation process in which corporations have become self-regulating entities, which allows for a ‘risk management of everything’ (cf. [1]).